WTI sank below $ 60 on Tuesday ahead of the upcoming OPEC meeting regarding oil production.
Many expect the coalition to ease production cuts in the coming months, including the 1 million bpd cut in Saudi Arabia.
As for the United States, production continues to recover after disruptions associated with abnormally cold weather in February. However, this does not negate the fact that it will take a long time to return to previous levels, as costs continue to rise as well.
Therefore, in the NYMEX, April futures for WTI crude sank by 1.5% and closed at $ 59.75 per barrel. Gasoline futures, on the other hand, decreased by 0.3% and traded at $ 1.9364 a gallon. As for heating oil, April futures fell by 1.6% and reached $ 1.8081 a gallon.
In ICE Futures, May contracts for Brent plunged by 1.6% and valued $ 62.70 a barrel, which is the lowest closing price since February 12.
Meanwhile, April futures for natural gas soared 2.2% and hit $ 2.839 per million BTU.
To date, the COVID-19 pandemic continues to create risks for the oil market, even amid sustained demand in Asia.
That said, OPEC members will hold a meeting this Thursday in order to discuss the level of oil production for the coming months.
Experts predict that the group will increase the total oil production for next month, adding around 1.5 million bpd. Saudi Arabia should also end its additional 1 million bpd production cut by then.
Back in February, oil production has decreased to 24.89 million bpd, which is the first decline observed since June last year. OPEC members have promised to comply with the agreed volume of production, while Saudi Arabia pledged to add 1 million more to its cut. All in all, supply in the Kingdom has decreased by 850,000 bpd in February.
If most of the members increase their production by 500,000 bpd, and if Saudi Arabia stops its additional cut, overall supply will grow by more than 1.3 million bpd in April.
